Iraq has delayed plans for a fourth oil and gas contract licensing round until January 2012 from November this year, after unveiling the 12 exploration blocks on offer.

Baghdad is offering a total of 80,700 square kilometres for exploration in 12 blocks ranging from 5,500 to 9,000 sq km across the country.

Despite the delay, the Oil Ministry is sticking to the 19 May deadline for international oil companies (IOCs) hoping to participate in the auction to submit prequalification documents (MEED 22:4:11).

Qualified firms will then be announced in June and a pre-bid meeting with IOCs will be held in August. A road show will be held in November and Baghdad will issue tender protocols and model contracts in December.

Oil Ministry officials say the exploration deals will be based on technical service contracts, meaning firms will be paid a flat fee rather than a share of any production. However, these would be different from the 20-year contracts signed in the three previous bid rounds.

Because of the ease with which many of Iraq’s existing oil fields could be tapped, the Oil Ministry has largely ignored exploring for oil in more remote locations. Under Oil Minister Abdulkarim al-Luaibi, the ministry is seeking to address this embarking on a two-year plan to explore for as-yet-undiscovered oil fields.

According to Al-Luaibi, the auction could add about 29 trillion cubic feet (cf) of gas from seven of the 12 blocks, as well as 10 billion barrels of oil in its reserves from the remaining five blocks.

Iraq already sits on the natural gas reserves estimated at 112 trillion cf, but has so far been unable to monetise this resource, flaring approximately 700 million cf of associated gas every day due to a lack of infrastructure to capture it.

Three of the announced blocks are located in the predominately Sunni Anbar province in the west of Iraq, while two others are shared by the Anbar, Nineveh and Najaf governorates.

In August 2010, the region’s 5.6 trillion cf Akkas gas field was awarded to a consortium of Korean Gas Corporation (Kogas) of South Korea and Kazakhstan’s Kazmunaigas during the third licensing round. The deal was publicly challenged by Anbar provincial council, which believes the investment plan orchestrated by the Oil Ministry will not sit well with its local vision based on domestic focused investment. Tensions could easily rise further in this restive region in the western desert.

Surprisingly, the auction also includes blocks in the southern provinces of Basra and Dhi-Qar, which are home to most of Iraq’s major producing oil fields and have been the focus of international investors’ attention.